Social change work is hard and frustrating and wonderful and terrible; it is also, at times, funny, quirky and just plain fascinating. With this blog we hope to capture all that goes into what we do at Capital Good Fund, and we invite you to join the conversation!

Monday, December 1, 2014

The Financial Implications of the President's Executive Order

President Obama's recent executive order on immigration will have a significant impact on the 4-5 million immigrants who are at present living in this country illegally. I'm not interested in discussing the politics of his action, so no need to read on if you're looking for that! Rather, I want to go over a key challenge for immigrants who wish to participate in the programs (known as DACA and DAPA): the cost.

This is nothing new. Ever since our founding in 2009 we've been providing loans to cover the cost of applying for US citizenship: $680 to the government plus legal fees. For many low-income families, that cost is simply too high; in fact, the Pew Charitable Trusts estimates that there are 700,000 to 800,000 legal permanent residents in this country who are eligible for citizenship but don't begin the process due to cost.

We don't yet know the details of how the executive order will be implemented, but it appears that there will be an application fee of $500 per person, and many people will also need legal advice, as noted by a recent NPR story titled "Executive Order On Immigration Creates Demand For Legal Advice." This means that even if a family has $500 lying around, many will still be held back by an inability to pay legal fees. The problem is compounded by the fact that there are not enough pro bono lawyers and law clinics to meet the need.

There is therefore an opportunity for Capital Good Fund to offer loans to cover these costs. In fact, we are confident that between 500,000 and one million people will need access to capital to participate in DACA or DAPA, and predatory lenders are chomping at the bit to take advantage of them. Over the years our immigration loan portfolio has performed exceedingly well (hardworking immigrants are excellent borrowers) and we are eager to deliver thousands, if not tens of thousands, of these loans.

At the moment a federal judge has issued an injunction holding up the program. Still, we are ready to go the moment it is lifted. We have partnered with the Catholic Diocese of Providence and Dorcas International Institute—two agencies that help families with immigration-related issues—to ensure that our borrowers get the help they need. And Navigant Credit Union, the largest in Rhode Island, has agreed to host a Capital Good Fund loan officer at their branch in Central Falls, a city of 19,000 residents with an estimated 2,500 to 5,000 undocumented individuals.

We'll stay on top of developments as they happen, and we will be at the ready to resolve the financial implications of the president's executive order as they arise. In so doing, we expect to create a scalable and replicable model, one that we will bring to countless states across the country.

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